Uncertainty over last white-tail C-17 sale to India

The Indian Ministry of Defence has one month to decide if it wants to acquire the last C-17.

The impending sale of the last Boeing C-17 Globemaster III heavy lift aircraft to India has been under a cloud because of the reluctance of the U.S. government to extend the validity of the Letter of Offer and Acceptance beyond October 17.

In September, the defence ministry had submitted a request for an extension of the validity of the LOA by 120 days after the date of expiry, but the U.S. government is unwilling to consider a grace period longer than a month at this point, and has sent a letter issuing an extension of 30 days.

This is partly because U.S. government has been under pressure from other customers eager to buy the last white-tail C-17, some of whom are willing to move quickly and have a far more compelling business case, with a sale to them being tied to potential orders for other equipment. There are at least three countries keen on taking the last aircraft.

Meanwhile, the file for the acquisition case in India’s defense ministry has not seen any movement for the last two weeks.

The C-17 production line closed in 2015 and the Indian Air Force (IAF) has, so far, missed opportunities to acquire any of the remaining ten white-tail aircraft, to the extent that only one aircraft is now available. The IAF had an option for six C-17s as part of its original order for ten aircraft.

No one familiar with Indian defence ministry practices and timelines has any illusions that the acquisition case can be completed in these 30 days, but observers are optimistic that if robust progress on the case can be shown at the end of this period, the U.S. government could be persuaded to allow a further grace period on the basis of a foreseeable, imminent conclusion of the order.

But failing this, the U.S. government is in no mood to agree to any open-ended extension, with customers waiting in line for the aircraft. The value of the order is estimated to be around USD 350 million.

Of the last ten C-17 aircraft, two were purchased by Australia and Kuwait, each, one by Canada, and four were snapped up by Qatar.